This research paper presents a novel method for the speed control of induction motors without using a speed sensor. The rotor speed can be accurately computed using an optimal control observer named the Kalman filter designed in this research paper. This replaces a speed sensor and eliminates the difficulty of the sensor installation in many applications. This research paper presents an advanced field oriented control of induction motors, based on a specific d-q coordinate model with the d-coordinate chosen to be in line with the rotor flux and the q-coordinate chosen to be 90⁰ lagging. The position of the rotor flux can be accurately computed using the Kalman filter. This eliminates the position sensors required accurately to monitor the flux. This research paper shows that as a result of this specific d-q transformation, the motor torque is proportional to the product of the rotor flux and the q-coordinate stator current. This significantly simplifies the induction motor control, such that the rotor flux is simply controlled by regulating the flux-related d-coordinates stator current and the motor torque is controlled just by regulating the q-coordinate stator current. This research paper presents a computational efficient recursive algorithm for Kalman filter which is specifically designed for the induction motor control. The Kalman filter provides the minimum variance state estimation and tolerates induction motor modelling and measurement errors. The Kalman filter can process all available measurements regardless of their precision (only two input current measurements required for the motor control), and provides a quick and optimal estimate of the variables of interest (the rotor speed and flux selected as outputs), as well as achieves a fast convergence. This research paper presents the digital signal processor (DSP) implementation of the field oriented control of induction motors using Kalman filter. The hardware requirements and all software modules are detailed. The experimental verification of the control method designed in this research paper is provided. Typical measurements are given to demonstrate the efficiency of the novel control presented in this research paper.